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Estimate number of suit tailor shops (NYC)- Market Sizing
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Hi there,
You'll learn a lot more from this by trying it out yourself first! Why don't you post your approach here and we can provide commentary?
How to approach market sizing
It's very simple: Do the approach the is the easiest for you given the question.
Are they asking you to estimate something where you don't even know where to begin from the top (maybe you have 0 clue as to the market size of the industry, the GDP of that country, etc. etc.)? Then do bottom-up!
Alternatively, does it seem impossible to do a realistic from-the-ground-up estimation of something (perhaps it requires just far too many steps and assumptions)? Then do top-down!
Fundamentally, you need to take the approach that just makes the most sense in that circumstance. Quickly think about the key assumptions / numbers required and whether you 1) Know them or 2) Can reasonably estimate them. If you can, go ahead!
An Example
He's a Q&A for a great market sizing question here asking to estimate # of electric charging stations in a city in 10 years:
This one could be answered top-down (as I did) by estimating population of the city, # of drivers/ cars, etc. etc.
OR, it could be answered bottom-up by estimating # of stations you see per block (or # of gas/petrol tanks), % increase this might be over time (or # of EV stations that would be needed per gas tank given EV stations take 10 times as long), and # of blocks you'd estimate the city to have.
Take a look here for additional practice! https://www.preplounge.com/en/management-consulting-cases/brain-teaser/intermediate/taxis-in-manhattan-market-sizing-229
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Please provide a suggestion.
Hint: you need to estimate:
- Demand: how many people buy tailored suits and how frequently
- Supply: how many people can a tailor shop sell per year
Divide one by the other and you have your estimate!
(edited)
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Hi there ,
This sounds like a cool one!
You can get a lot out of the Q&A here if you provide suggestions first. This way you can get targeted feedback. So feel free to give it a go.
Aside from this, what I always suggest with market sizing practice is to try and come up with more than one approach. Push yourself for creative thinking and figure out how else you could approach the problem beyond the intuitive first answer.
Best,
Cristian
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Its best to update your question and provide a model approach that you are thinking about.
That ways we can comment and critique.
Think about supply-based estimation, demand-based estimation, macro-economic estimation, geographic estimation and various other methods. Try them out and see which ones are most logical and perhaps share them here on the forum for review and criticism.
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